Poverty amid prosperity

from The Toronto Star

Report identifies six groups at high risk
RITA TRICHUR
BUSINESS REPORTER

Ontario enjoys a prosperous economy by global standards but poverty here occurs more "frequently and persistently" for six high-risk groups, says a report.

The groups named by the Institute for Competitiveness & Prosperity: recent immigrants, single parents, the disabled, aboriginals, high school dropouts and singles aged 45 to 64.

The not-for-profit organization functions as the research arm of Ontario's Task Force on Competitiveness, Productivity and Economic Progress. Its study entitled "Prosperity, Inequality and Poverty" examines how overall prosperity levels interact with inequality and poverty.

"Our research does show that inequality in Ontario and Canada has been increasing in recent years, even though overall prosperity has been advancing," the report says.

It suggests that families with a main breadwinner in one of those risk groups are 3.7 times more likely not to have enough money to cover life's necessities. In contrast, Ontarians who are not members of those groups are less likely to be poor and three times more likely to be among the highest wage earners.

Moreover, the economic exclusion of these groups is widening Ontario's prosperity gap, which the institute defines as the difference between what the province actually achieves in terms of gross domestic product per capita and what it could "reasonably accomplish."

And while individuals in the six groups are more acutely affected, the report suggests the widening prosperity gap does a disservice to all Ontarians. That's because an estimated prosperity gap of $6,100 per capita, costs the average household about $8,400 in "forgone" personal disposable income each year.

That lost money not only holds back consumer spending, it pulls down government revenues by $26 billion annually, the study says.

"With this added revenue, governments would have more choices for public policy – for example, to increase spending in high priority areas and to lower tax rates for Ontarians," the report said.

Each of the six risk groups has its own reasons for being poor but it's not because Ontario as a whole is more prosperous, says Jim Milway, the institute's executive director.

"The problem is that things that drive prosperity these days work against people with few skills or people who can't get into the workforce," Milway said in an interview.

"More and more this is skill-based economy and more and more of our prosperity is going to come from skills. And to the extent to which individuals don't have those skills, they are going to get left behind."

While education appears to be the common path out of poverty, each group requires its own solution. For immigrants, upgrading language and professional skills is key, he said.

Single parents, mothers in particular, should be assisted in finishing high school and, if possible, post-secondary studies. Tax incentives could also be used to help those with low-paying jobs, Milway said. The report, however, is short of solutions for the disabled, aboriginals and single people aged 45 to 64.